The present invention relates to verifying that financial data is accurate, and in particular, to tracking and reporting the verification and approval process in addition to tracking and reporting other user-defined issues associated with the accuracy of the data. Many businesses receive large amounts of financial data on a daily or other frequent basis. The businesses include not only banks, saving and loan companies, mortgage companies, investment firms, brokerage companies, insurance companies, and the like, but also any type of business that manages multiple internal and/or external accounts, regardless of the size of the business. The financial data may be associated with some aspect of the business itself or with a division or subsidiary of the business. In either situation, the financial data may be segregated into sub-groups, which may be referred to by an arbitrary designation, such as an account number, or cost center.
The business typically maintains a general ledger system with balance sheets for each sub-group of financial data. The changes to the financial data of the sub-group are recorded in the sub-group's balance sheet as they occur. Generally, at a later time, such as once a month or once a quarter, the balance sheet is reconciled against the underlying documentation supporting the changes in the balance sheet to ensure the balance sheet is a correct representation of the sub-group's financial status.
For instance, in the banking industry, a bank maintains a balance sheet for each account to record all of the transactions associated with the account on a day-to-day basis. The underlying documentation supporting the value of the asset or liability associated with the transaction is then analyzed on a daily, weekly or other basis to ensure that the values recorded in the balance sheet are supported by and reconcile with the underlying transaction documentation. This process is termed the reconciliation of the account.
Although reconciling the balance sheet against the underlying transaction documentation is an important function of the business, in the conventional process, no way exists to efficiently ensure the accuracy of the reconciliation for all of the sub-groups or accounts. Even if the reconciliation is reviewed and approved by another individual, there is no way to track the reconciliation and approval process and to ensure all of the sub-groups or accounts are receiving the correct type of analysis at the end of the specified period. In a business with multiple sub-groups or accounts, it would take a significant amount of time to track and ensure that the reconciliation and approval process was performed appropriately at the end of each specified period because each sub-group or account would have to be accessed and checked individually.
In addition, during the reconciliation procedure, outstanding issues may be identified regarding the account. Some of these issues may be resolved immediately, but others may be set aside for resolution at a later time. For example, in a bank account, a transaction may not have cleared at the time of reconciliation, but it would be reasonable to assume that it will clear in the next few days through the normal banking channels. In this situation, the transaction will be recorded in a separate document associated with the account, such as an “aging schedule.” The aging schedule will be revisited during the next reconciliation to determine if the transaction has already cleared or if it is an issue that must be resolved at that time.
In the conventional reconciliation procedures, there does not exist a way to monitor the issues that are set aside for resolution at a later time. Many times these issues are not addressed until it is too late to resolve them because they may be overlooked at the next reconciliation period or because of a lack of accountability for the issue by the person responsible for resolution. Additionally, there is no efficient and accurate way to track all of the outstanding issues or to track who the individuals are that authorized setting the issues aside to be resolved at a later date. In the conventional process, all of the files or documents associated with each sub-group or account would have to be accessed individually in order to track the status of the outstanding issues.
Thus, there exists a need in the industry for a system that tracks and reports the reconciliation and approval process and provides instantaneous reporting regarding the status of the process. In addition, there exists a need for a system to track and report all of the outstanding issues associated with all of the sub-groups or accounts managed by a business such that the issues can be addressed before it is too late to resolve them properly.